Q4 2021 Motorsport Games Inc Earnings Call
Greetings and welcome to Motorsport Games Inc. 4th quarter and full year 2021 earnings.
Greetings and welcome to Motorsport Games, Inc, fourth quarter and full year 2021 earnings call.
At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being...
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded I would now like to turn the conference over to your host Ashley decent loan from ICR. Please go ahead.
I would now like to turn the conference over to your host, Ashley DeSimone, from ICR. Please go ahead.
Thank you and welcome to motor Sport games fourth quarter, and full year 2021 earnings conference call and webcast.
Ashley DeSimone: Thank you and welcome to Motorsport Games' fourth quarter and full year 2021 earnings conference call and webcast.
Ashley DeSimone: On today's call are Dmitry Kosko, Motorsport Games Executive Chairman and CEO , and John Mu, Chief Financial Officer. By now, everyone should have access to the company's fourth quarter and full year 2021 earnings press
On today's call Art, Dmitry, Cosco motor Sport games, Executive Chairman, and CEO , and John <unk>, Chief Financial Officer.
By now everyone should have access to the company's fourth quarter and full year 2021 earnings press release filed today. After the market close. This is available on the Investor Relations website section of motor Sport games as website at Www Dot motor sport games Dot com.
Ashley DeSimone: filed today after the market closed. This is available on the Investor Relations website section of Motorsport Games' website at www.motorsportgames.com.
Ashley DeSimone: During the course of this call, management may make forward-looking statements within the meaning of the U.S. Federal Securities Law.
During the course of this call management may make forward looking statements within the meaning of the U S Federal Securities laws.
Ashley DeSimone: These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Accept as required by law, the company undertakes no obligation to update any forward-looking statement made on this call or to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward looking statements except as required by law. The company undertakes no obligation to update any forward looking statements made on this call or to update or alter it.
Forward looking statements, whether as a result of new information future events or otherwise.
Ashley DeSimone: Please refer to today's press release and the company's filings with the SEC, including its most recent annual report on Form 10-K for the year ended December 31st, 2021, for a detailed discussion of certain of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.
Please refer to today's press release, and the company's filings with the SEC, including its most recent annual report on Form 10-K for the year ended December 31, 2021 for a detailed discussion of certain of the risks that could cause actual results to differ materially from those expressed or implied in any forward looking statements.
<unk> today.
Ashley DeSimone: In today's conference call, we will refer to certain non- GAAP financial measures, such as adjusted EBITDA, as we discussed the Fourth Quarter and Flayer 2021 financial results. You will find a reconciliation of these non- GAAP measures to their most directly comparable GAAP measures , as well as other related disclosures in the press release issued today.
In today's conference call, we will refer to certain non-GAAP financial measures such as adjusted EBITDA as we discuss the fourth quarter and full year 2021 financial results you will find a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures as well as other related disclosures in the press release issued today and.
Speaker Change: And now I'd like to turn the call over to Dmitry Kosko, Chief Executive Officer of Motorsport Games. Dmitry?
Now I'd like to turn the call over to Dmitry, Cosco, Chief Executive Officer of Motor Sport games Dmitry.
Nutri Cosco: Thank you and hello everyone. I'd like to start today by recognizing our development team, some of whom are in Moscow in the midst of this unexcusable and challenging situation. How hard so were the people in Ukraine and all those impacted by the war. This is a deeply personal issue for me as I'm half Ukrainian myself.
Thank you and Hello, everyone I'd like to start today by recognizing our development team almost Kumar in Moscow in the midst of this unexcusable in challenging situations.
So with the people in Ukraine, and all of those impacted by the war.
It's a deeply personal issue for me is I'm half Ukrainian myself.
Nutri Cosco: I have been in constant communication with our Moscow team and they share a concern and profound desire for peace and security.
I have been in constant communication with our Moscow team and they share our concern and profound desire for peace and security.
Nutri Cosco: While it is challenging working through the complexity of the work, here's what we have done over the past month to assure that we continue to build out our product roadmap with minimal disruption.
While it is challenging working through the complexity of a war here's what we have done over the past months. We're sure that we continue to build out our product roadmap with minimal disruption.
Nutri Cosco: First, we have always been able to switch to remote work if need be during the pandemic, especially during the COVID outbreaks where we saw lockdowns and other hurdles to manage the scale or development capabilities and temporary transition to remote work.
First.
We have always been able to switch to remote work if need be.
We're independent mix, especially during the peak Covid outbreaks, where we saw lockdowns and other hurdles the managed to scale, our development capabilities and temporary transition to remote work we.
Nutri Cosco: We do not foresee any issues if we need to transition some of our team members to remote work again.
We do not foresee any issues if they need to transition some of our team members to remote work again.
Nutri Cosco: because we have the infrastructure and process in place to be able to remain flexible.
Because we have the infrastructure and process in place to be able to remain flexible.
Second we have great partnership with various outsourced developers and studios, especially over the last year, we have been a great relationship with several outsourced studio who are assisting us with our new product development.
Nutri Cosco: Second, we have great partnership with various outsourced developers and studios. Especially over the last year, we have built great relationships with several outsourced studios who are assisting us with a new product development.
Nutri Cosco: These development studios consist of professional and highly experienced teams that work with many different leading gaming companies.
These developments studios consists of professional and highly experienced teams that work with many different leading gaming companies.
Nutri Cosco: We're currently having conversations with additional development studios, and we'll be ready to engage them if necessary to assure development pipeline does not experience significant delay.
Currently having conversations with additional development studios, and we'll be ready to engage them if necessary to assure development pipeline does not experienced significant do it.
Nutri Cosco: Third, we have offered our Moscow staff a possibility to relocate if they choose and able to do so. As I mentioned earlier, we have the advantage of being flexible. Earlier this month when I had the conversation with that team, given the opportunity to relocate to one of our other global offices,
Third we have offered our multiple staff of profitability to relocate if they choose and able to do so.
As I mentioned earlier, we have the advantage of being flexible earlier. This month, when I had the conversation or the team given the opportunity to relocate to one of our other global offices.
Nutri Cosco: While we acknowledge and appreciate the complexity of such relocation and corresponding immigration implications, our offices in Netherlands, UK, Australia, and the US would welcome those folks with open arms. Now, let's move on.
We acknowledge and appreciate the complexity of such relocation and corresponding immigration implications our offices in Netherlands, U K, Australia, and the U S would welcome those folks with open arms.
Now, let's move on to our product roadmap in development.
Nutri Cosco: Our goal remains to build a portfolio of top racing games across world-class IP and across all platforms.
Our goal remains to build a portfolio of operating gains across world class IP and across all platforms.
Nutri Cosco: We have a strong list of IP being the official video game license holder of NASCAR, IndyCar, VTCC, WEC, and 24-hour Le Mans. This list of IP gives us an opportunity to build official racing games and enables us to provide with captivating experiences to our audiences all over the world.
We have a strong list of IP being the official video game license holder of NASCAR Indy car BTC WEC and 'twenty followed in the mall.
This list of IP gives us an opportunity to build a official racing games and enables us to provide with captivating experiences to our audiences all over the world.
Nutri Cosco: Here's an update on where we are today on ignition since the launch of NASCAR 21 ignition in October 2021, we have been working diligently to provide patches and updates for continuous improvement.
Here's an update on where we are today.
On admission.
Since the launch of NASCAR 'twenty one admission in October 21, we have been working diligently to provide patches and updates for continuous improvements.
Nutri Cosco: So far, we have released eight updates and continue to provide quality of life improvements to the game.
We have released eight update and continue to provide quality of life improvements to the game.
Nutri Cosco: We continue striving to make sure that the next NASCAR release and all future products be bringing excitement and satisfying gaming experiences to our customers.
We continue striving to make sure that the next NASCAR relief and all future products be bringing.
Bringing excitement and satisfying gaming experiences to our customers.
Nutri Cosco: We also launched our NASCAR GIMME franchise on Nintendo Switch platform for the first time on November 19th.
We'll also launch our NASCAR gaming franchise on Nintendo switch platform for the first time on November 19.
Nutri Cosco: and we named it NASCAR, its ultimate edition product.
And we named with NASCAR is ultimate additional swaps.
Nutri Cosco: We're happy to report that this game has met our expectations and delivered smiles to our fans while currently being rated at about 4.6 out of 5 stars on Amazon.
We're happy to report that this game has met our expectations and delivered smiles to our fans. While currently being rated at about four six out of five stars on Amazon.
Our craft, we're happy to report that in January of this year. We released the full version of car crime are realistic carding simulation game.
Nutri Cosco: CarCraft, we're happy to report that in January of this year we'll release a full version of CarCraft, our realistic karting simulation game.
Nutri Cosco: on Steam, where it currently holds a rating of a very positive with over 1,700 reviews.
On theme, where it currently holds a rating is a very positive with over 1700 reviews Carter.
Nutri Cosco: Car craft is a game that has the potential to generate meaningful revenue for us in the future.
<unk> is a game that has the potential to generate meaningful revenue for us in the future.
Let's touch on our factor to gaming Esport ballpark.
Nutri Cosco: We have been working to implement one of the most requested features by fans, which is the new user interface update. We were able to release this ahead of our internal release schedule in January of this year.
We had been working to implement one of the most requested features by fans, which is the new user interface update.
We were able to release this ahead of our internal release schedule in January of this year.
Nutri Cosco: as monitored through user feedback on various social networks, has been welcomed and very much appreciated by the community.
As monitor through user feedback on various social networks has been broken and very much appreciated by the community.
Nutri Cosco: and we were also able to reorganize our content release schedule on ARPACTA 2 and plan to offer our fans more content on a predictable quarterly release schedule.
And we were also able to reorganize our content release schedule on our practice to <unk>.
And plan to offer our fans more content on a predictable quarterly release schedule.
Nutri Cosco: Our gaming and simulation platforms, such as our factor 2, continues to be recognized by the motorsport industry as 1 of the leading go to products of choice for drivers, lead partners. 1 new part.
Our gaming and simulation platforms, such as our effective two continues to be recognized by the motorsport industry as one of the leading go to products of choice for drivers League partners.
One new partner of ours as kindred concepts.
Nutri Cosco: Formula One partnered with Kindred to create an immersive, state-of-the-art F1 racing simulation experience made accessible to the mass audience, and Kindred has chosen our R-Factor 2 as the simulation platform to help empower their F1 racing simulation experience.
Formula one partnered with kindred to create an immersive state of the art F. One racing simulation experience made accessible to the mass audience.
And kindred has chosen our our factor too as the simulation platform called empowered their former racing simulation experience.
Nutri Cosco: With this partnership, we'll be virtually recreating some of the world's famous Formula One tracks, cars, and most recent liveries, powering the authentic F1 experience to the visitor.
With this partnership will be virtually recreating some of the world famous Formula one tracks cars and most recent deliveries.
During the Atlantic F. One experience to the visitors.
Nutri Cosco: Another example that earlier this week, we announced that R Factor 2 is now an official sim racing platform for Formula E.
Another example that you already did this week, we announced that our factor too is now an official been racing platform Formula E.
Nutri Cosco: As we switch gears in 2022, our focus remains on improving and expanding our NASCAR gaming franchise, as we work to expand our portfolio of overall games.
As we switch gears in 2022, our focus remains on improving and expanding our NASCAR gaming franchise as we work to expand our portfolio of overall games.
Nutri Cosco: In 2022, we plan to update our NASCAR game for major consoles and PC, bringing the excitement of the next-generation cars from the 2022 NASCAR season to the masses.
In 2022, we plan to update our NASCAR game for major consoles and PC, bringing the excitement of the next generation cars from the 2022 NASCAR season to the masses as well as launching our new 2022 version of our NASCAR game for Nintendo switch platform.
Nutri Cosco: as well as launching our new 2022 version of a NASCAR game for Nintendo Switch platform.
Nutri Cosco: Additionally, we're currently still intent to soft launch our first hyper-casual mobile category game with our NASCAR Match 3 title sometime in 2020.
Additionally, we're currently still intend to soft launch our first hyper casual mobile category game with our NASCAR match three titles sometime in 2022.
Nutri Cosco: The NASCAR Gaming Franchise continues to be an important foundation to our gaming franchises that we have under license, which include BTC, IndyCar, and Le Mans.
The NASCAR gaming franchise continues to be an important foundation to our gaming franchises that we have under license which include DTC in the car in the months and our law.
Nutri Cosco: and our learnings from NASCAR 21 Ignition launch are already being integrated into a Motorsport Games engine that we continue to evolve internally to assure that our next gaming franchises, together with NASCAR, continue to improve as we build on top of our previous release.
Earnings from NASCAR 'twenty one admission.
Launch already being integrated into a motorsport games engine that we continue to evolve internally to assure that our next gaming franchises together with NASCAR continued to improve as we build on top of our previous releases.
Nutri Cosco: Just as we set out on our vision from the beginning, we continue to move towards the goal where we have multiple franchises in market with multiple games on multiple platforms.
Just as we set out on a vision from the beginning we continue to move towards the goal we have multiple franchises in market with multiple games on multiple platforms.
Nutri Cosco: And we believe we are on target for 2023 to beat that year for us.
And we believe we are on target for 2023 to be that year for us.
Onto development with.
Nutri Cosco: With the help of our experienced leadership team, I've taken full responsibility for overseeing our production studios and development.
With the help of our experienced leadership team, taking full responsibility for overseeing our production studios and development teams.
Nutri Cosco: additionally standardized global process and tools we have implemented will allow great clarity for my decision-making role.
Additionally, standardized global process and tools, we have implemented.
A greater clarity for my decision making rules.
Nutri Cosco: We have also promoted technical experts to leadership positions.
We have also promoted technical experts to leadership positions.
Nutri Cosco: We believe that this new development management structure will greatly benefit our future game and product releases, as together with management, we will continue to monitor the progress of all our studios while we scale our capabilities.
We believe that this new development management structure will greatly benefit our future game and product releases as together with management, we will continue to monitor the progress of all of our studios, while we scale our capabilities.
We also reorganized our QA processes and department to assure further checkpoints inefficiencies in locating future issues within our products, which we believe will improve our QA process for future game releases.
Nutri Cosco: We also reorganize our QA processes and department to assure further checkpoints and efficiency in locating future issues within our products, which we believe will improve our QA process for future gamers.
We continue to strive towards improving our processes and technology building off the nice start 'twenty, one ignition launch as we scale our company further to offer our customer multiple racing franchises across a variety of platforms.
Nutri Cosco: We continue to strive towards improving our processes and technology, building off the NASCAR 21 Ignition launch as we scale our company further to offer our customer multiple racing franchises across a variety of platforms.
I would like to touch on our esports segment.
Nutri Cosco: We believe our investment related to this area are really starting to pay off.
We believe our investment related to this area are really starting to pay off.
Nutri Cosco: continuing to leverage our R Factor 2 platform, and building on the momentum we achieved with eSports in 2020, where we replaced certain motorsport events with their virtual counterparts due to the COVID-19 pandemic.
<unk> to leverage our <unk> platform and building on the momentum we achieved with esports in 2020, we replaced certain motorsport events with their virtual counterparts due to the COVID-19 pandemic.
Nutri Cosco: In 2021, we turned our 24-hour Le Mans virtual hit into an annual series together with great partners such as Rolex, Goodyear, Total Energy, Lego Technics, Algorand, and others that came along for the ride.
In 2021, we turned our 24 hour among virtual hit into an annual series together with great partners, such as Prolix Goodyear total LNG Lego techniques algorithm and others. They came along for the right.
Nutri Cosco: And our 2021 into 2022 24-hour Le Mans virtual series has been enjoyed by more than 81 million fans across digital and linear channels.
And our 2021 into 2020 to 24 hour Lamont virtual series has been enjoyed by more than 81 million fans across digital and linear channels.
Nutri Cosco: These are the type of official eSports series we look to replicate with all of our partners such as BTCC, IndyCar, NASCAR, and others.
These are the type of official esports series, we will look to replicate with all of our partners such as B C and D card NASCAR and others.
Nutri Cosco: And as we release our dedicated games for each one of these great series, we believe our esports program will serve as a great marketing tool, showcasing exciting competitions our games bring at the highest level.
And as we release, our dedicated games for each one of these rates serious we believe our esport program will serve as a great marketing tool showcasing exciting competitions are games bring at the highest level.
We have already started to scale, our esport program with a macro is the car T Sport Pro challenge featuring almost the entire official in the power grid.
Nutri Cosco: We have already started to scale our eSport program with an inaugural IndyCar eSport Pro Challenge featuring almost the entire official IndyCar grid.
Allow me to quickly add a reminder, that our business is organized in three important pillars games esports and community and we're constantly making progress in each of these pillars and look forward to showcasing this progress in our upcoming quarterly materials.
Nutri Cosco: Allow me to quickly add a reminder that our business is organized in three important pillars games, esports, and community and we're constantly making progress in each of these pillars and look forward to showcasing this progress in our upcoming quarterly materials. Lastly, I'd like to thank you all for joining us today and I look forward to seeing you again soon.
Lastly, I'd like to address our liquidity.
Nutri Cosco: Currency, we're debt-free, and our 2021 year-end balance sheet illustrates that we had approximately $17.8 million in available cash on hand.
Currently we are debt free and our 2021 year end balance sheet illustrates though we've had approximately $17 8 million in available cash on hand.
Nutri Cosco: As of today, we have nearly $12 million of available cash.
As of today, we have nearly $12 million still available cash on hand.
Nutri Cosco: While our 2021 Form 10-K indicates a doubt about our ability to continue as a going concern, we're currently evaluating resources of funding with different options on the table so that we have the resources to reach our goal.
While our 2021 Form 10-K indicates a doubt about our ability to continue as a going concern. We're currently evaluating new sources of funding with different options on the table. So that we have the resources to reach our goals.
Nutri Cosco: A year ago, we made a conscious decision to acquire assets to help us launch more products quicker. We have successfully utilized these acquisitions to get us closer to a portfolio that is diversified and that we believe is capable of achieving profitable revenue.
A year ago, we made a conscious decision to acquire assets to help us launch more products quicker. We have successfully utilized these acquisitions to get us closer to a portfolio that is diversified and that we believe is capable of achieving profitable revenues.
Nutri Cosco: And I remain committed to seeing this through and getting to 2023 when we plan to have multiple franchises with multiple games on multiple platforms in market, each at different stages in their life cycle, and many with long tail based on high quality IP racks.
And I remain committed to seeing this through and getting to 2023, when we plan to have multiple franchises with multiple games on multiple platforms in market each at different stages in their lifecycle and many with long tail based on high quality IP era.
We also believe that we have a flexibility to hit the pause on some of those development initiatives in order to materially cut our cash burn if we decide that is in our best long term interest.
Nutri Cosco: We also believe that we have a flexibility to hit the pause on some of those development initiatives in order to materially cut our cash flow if we decide that is in our best long-term.
Nutri Cosco: We expect these decisions will be made in the coming months after we finalize our financing decisions, and I intend to keep you all updated as we move through this process.
We expect this decisions will be made in the coming months. After we finalize our financing decisions and I intend to keep you all updated as we move through this process.
Before I pass it on to John I'd like to reinforce the fact that we have long term licenses and partnerships to create great official racing games and esports over a long period of time for captive audiences and beyond while we call today to community and become synonymous with virtual racing.
Nutri Cosco: Before I pass it on to John , I'd like to reinforce the fact that we have long-term licenses and partnerships to create great official racing games and e-sports over a long period of time for captive audiences and beyond, while we cultivate a community and become synonymous with virtual racing. With that, let me hand it over to John .
With that let me hand, it over to John for a review of our financials.
John: Thank you, Dimitri. I'd like to share summary financial highlights for the fourth quarter and year ended December 31st, 2021.
Thank you Dmitry I'd like to share summary, financial highlights for the fourth quarter and year ended December 31 2021.
John: Revenues were 8.2 million for the fourth quarter ended December 31st 2021 compared to 2.9 million in the prior year period. The gap between quarterly comparisons is largely attributable to the launch of NASCAR 21 ignition in the fourth quarter of 2021 versus the launch of NASCAR Heat 5 which occurred in the third quarter of 2021.
Revenues were $8 2 million for the fourth quarter ended December 31, 2021, compared to $2 9 million in the prior year period. The gap between quarterly comparisons is largely attributable to the launch of NASCAR twenty-one ignition in the fourth quarter of 2021 versus the launch of Nash.
<unk> five which occurred in the third quarter of 2020.
Our net loss was 7 million and $3 1 million respectively.
John: Our net loss was $7 million and $3.1 million, respectively, for the three months ended December 31, 2021 and 2020.
For the three months ended December 31, 2021 at 2020.
Quarterly comparisons are significantly affected by the upfront development and marketing costs associated with creating new products for our recently acquired game licenses.
John: The quarterly comparisons are significantly affected by the upfront development and marketing costs associated with creating new products for a recently acquired game license.
Our adjusted EBITDA loss was $5 4 million for the three months ended December 31, 2021, compared to an adjusted EBITDA loss of $2 4 million for the three months ended December 31 2020.
John: Our adjusted EBITDA loss was $5.4 million for the three months ended December 31, 2021 compared to an adjusted EBITDA loss of $2.4 million for the three months ended December 31, 2020.
John: $3 million increase in adjusted EBITDA loss was primarily due to $5.7 million increase in 4 Q2 021 operating expenses that the company invested to build out our portfolio of gains.
The $3 million increase in adjusted EBITDA loss was primarily due to $5 7 million increase in <unk> 2021 operating expenses that the company invested to build out our portfolio of games.
John: This was partially offset by a $1.7 million increase in gross profit from higher game sales in Q4 2021 and operating expenses adjusted to $1.7 million in Q4 2021.
This was partially offset by a $1 $7 million increase in gross profit from higher game sales in Q4, 2021, and operating expenses adjustments for expenses recorded for Q2 thousand 21, including <unk> 3 million for 2021 impairment.
John: for expenses recorded for Q2021, including $0.3 million for 2021 impairment of intangible assets, $0.3 million in depreciation.
Intangible assets.
<unk> 3 million and depreciation and amortization.
John: $0.2 million in 2021 acquisition-related expenses, and $0.2 million in 2021 stock-based compensation. For the year.
Point 2 million in 2021 acquisition related expenses.
And point 2 million in 2021 stock based compensation.
For the year ended December 31 2021.
Revenues from our gaming segment decreased by $4 5 million or 24% to $14 3 million from $18 8 million for the year ended December 31 2020.
John: $18.8 million for the year ended December 31, 2020.
John: The decrease in revenues compared to 2020 period was primarily due to a $4.4 million reduction in revenues from our NASCAR Series Game title.
The decrease in revenues compared to 2020 period was primarily due to a $4 4 million reduction in revenues from our NASCAR series game titles. This.
John: This was primarily driven by a lower initial sales of NASCAR 21 ignition as compared to NASCAR Heat 5 in the prior year and the timing of our new product release schedule.
This was primarily driven by a lower initial sales of NASCAR twenty-one ignition as compared to NASCAR heat five in the prior year and the timing of our new product release schedule.
John: as there were fewer months to generate revenues from our NASCAR 21 ignition game due to its being released in October .
As there were fewer months to generate revenues from our NASCAR twenty-one ignition game.
Due to its being released in October 21.
John: compared to our NASCAR E5 video game that was released in July of 2016.
Paired to our NASCAR heat five video game that was released in July of 2020.
John: For the year ended December 31st, 2021, revenues from our eSports segment increased by 500,000 or 169% to 800,000.
For the year ended December 31, 2021 revenues from our esports segment increased by 500000 or 169% to 800000 from 300000 for the year ended December 31 2020.
John: from 300,000 for the year-end of December 31, 2020.
John: The increase was primarily due to sponsorship events, revenues from Le Mans eSports series limit.
The increase was primarily due the sponsorship events revenues from my Mom's Esports series limited.
John: which were consolidated into our results for the first time following our acquisition of a controlling interest in the company in early 2021. Whereas in the prior period, it had been reflected as earnings from equity method investors.
Which were consolidated into our results for the first time following our acquisition of a controlling interest in the company in early 2021.
Whereas in the prior period that had been reflected as earnings from equity method investments.
Adjusted EBITDA loss was $17 4 million for the year ended December 31, 2021 compared to an adjusted EBITDA income of <unk> 9 billion for the year ended December 31, 2020, reflecting lower year over year revenues higher cost to develop and market.
John: The adjusted EBITDA loss was $17.4 million for the year-ended December 31, 2021, compared to an adjusted EBITDA income of $0.9 million for the year-ended December 31, 2021.
John: reflecting lower year over year revenues, higher costs to develop and market new game franchises, and the timing of new game release.
New game franchises and the timing of new game releases.
We expect to incur losses for the foreseeable future as we continue to incur expenses to develop new game franchises.
John: We expect to incur losses for the foreseeable future as we continue to incur expenses to develop new game franchises.
John: Accordingly, we do not believe that our existing cash-on-hand will be sufficient to fund our operations for the next 12 months. At this time, we will continue to fund our operations.
Accordingly, we do not believe that our existing cash on hand will be sufficient to fund our operations for the next 12 months.
At this time, we're not providing forward guidance.
John: I would now like to turn the call back to Dmitri for closing remarks. Dmitri?
I would now like to turn the call back to Dmitry for closing remarks Dmitry.
Dmitri: Thanks, John . Overall, 2021 was a significant year for us. We will build upon our groundwork for the future game releases by attracting development talent and people that share a passion for racing games, acquiring necessary technology components which will help our game stand out and scale, and allowing us to further develop our platform and processes as we look to build out multiple franchises with our long-term life as a part
Thanks, John overall 2021 was a significant year for us we built upon our groundwork for the future game releases by attracting developing talent and people that share a passion for racing games acquiring necessary technology components, which will help our gaze standout at scale and allowing us to fill.
To develop our platform and processes as we look to build out multiple franchises with a long term life of that partnership.
Dmitri: As you will note in our form 10K, our 2021 object financial statements received a going concern qualification.
As you will note in our Form 10-K for 2020 , one, albeit financial statements received the going concern qualification.
Dmitri: I will rest assured that we are working diligently to analyze all aspects of our business to achieve cost reductions and free up funds to bolster near-term liquidity. Additionally, we are currently discussing funding options, including debt and equity financing, so we could continue our product roadmap with no significant changes or disruptions and ultimately generate returns for shareholders.
Rest assured that we're working diligently to analyze all aspects of our business to achieve cost reductions and free up funds to bolster our near term liquidity.
Additionally, we're currently discussing funding options, including debt and equity financing. So we could continue our product roadmap with no significant changes or disruption and ultimately generate returns for our shareholders.
Speaker Change: Thank you for joining us today, and now let's go to questions. Operator?
And for joining us today and now let's go to questions operator.
Speaker Change: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2.
Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.
Speaker Change: equipment and may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions.
<unk> Mis Darkies one moment, please while we poll for questions.
Our first question comes from Mike Hickey with benchmark. Please proceed with your question.
Speaker Change: Hey, Dimitri and John , good afternoon, guys. Thanks for taking my questions. Dimitri, just curious on your upcoming NASCAR 22, what you're thinking here in terms of timing of the game. I know you've sort of experimented with different release days, but what you think you can hit and sort of your view on. But I'm guessing we'll be a step up in quality with the backdrop that you've had, you know, some disruption on the development side.
Hey, Dmitry and Jon Good afternoon, guys. Thank.
Thanks for taking my questions to meet you just curious on your upcoming NASCAR.
To what Youre thinking here in terms of.
Timing of the game I know you've sort of experimenting with different these days, but we're here.
Do you think you can hit in sort of your view on.
But I'm guessing it will be a step up.
With the backdrop that you've had some disruption on the development side.
Thanks, Mike So you're absolutely right definitely a step up you know as you released one game and you build upon.
Speaker Change: So you're absolutely right. Definitely a step up, you know, as you release one game and you build upon that one game. It only gets better from there, right? As you have more and more time to fine tune things and improve upon.
That's one game alright, it only gets better from there right as you have more and more time to fine tune things and improve upon as far as timing.
Speaker Change: As far as timing, we do have now a significant amount of data of what it's like to launch a game all the way from beginning of July , which we've done with our keep 5, all the way to the end of October , which we've done last year with Ignition.
We do have now a significant amount of data or what.
Got it like to launch a game all the way from the beginning of July which we're done with our <unk> five all the way to the end of October which was done last year with ignition so essentially covering almost the second half of the NASCAR season, all the way to its finale.
Speaker Change: So essentially covering almost the second half of the NASCAR season all the way to its finale.
Speaker Change: One thing we'd like to do is continue to walk our NASCAR releases.
One thing wed like to do is continue to work our NASCAR releases closer to the beginning of the season, which normally happens around in February but of course, we cannot make those drastic changes are right away as that takes a significant amount.
Speaker Change: closer to the beginning of the season, which normally happens around February , but of course we cannot make those drastic changes right away as that takes
Speaker Change: a significant amount of time available for a certain annual product to have it available for sale before the new one comes out.
At a time available for a certain annual product.
To have it available for sale before the new one comes out. So you can expect us to continue to work at a closer to the beginning of the season, but not take major steps like six month jumps and so on.
Speaker Change: So you could expect us to continue to walk it closer to the beginning of the season, but not take major steps like six-month jumps and so on. And last year, being released at the end of October , I think fair to assume that we would be somewhere between that July , August , September , those type of windows on time for the NASCAR playoffs.
And last year being released at the end of October I think fair to assume.
That would be somewhere between that.
July August September .
Type of Windows on time for the NASCAR playoffs.
Speaker Change: I guess a NASCAR 23 would be your next release in calendar 22.
Right.
NASCAR 23 would be our next release.
In calendar 'twenty two is it.
Speaker Change: Should we sort of think about – I know you're not giving guidance, but should we sort of think about what you did in county year 20 off the success of Heat 5? I think you're on $19 million. Is that sort of your positive eat the down? Obviously, your off-ex profile has changed, but is that sort of on the revenue side? Dmitry, do you think that's an achievable goal on revenues? I mean, do you step up in quality here, which I'm sure you will.
Should we sort of think if I may not give you guidance should we sort of think about what you did in calendar year 'twenty off the success of <unk>, five I think around $19 million.
So in your positive EBITDA, obviously your Opex profile has changed is that sort of on the revenue side Dmitry easy fast and.
Cheesable.
Go on revenues and you do step up in quality here, which I'm sure you well.
Speaker Change: It's a milestone, Mike. So, to us, I wouldn't say the goal. One of the goals on the NASCAR franchise alone is to get to the levels where EA was in early 2000s, where they held the NASCAR license that we hold now. And they were averaging always in seven digits during the data that's available to us, with some years speaking around two and a half million units.
It's a milestone with Mike so to us I wouldn't say the goal one of the goals and the NASCAR franchise alone is to get to the levels, where he was an early two thousands why would they held a NASCAR license that we hold now and they were averaging always in seven digits during.
The data that's available to us with some year speaking around two and a half million units.
Speaker Change: That is what I would say is the goal for the NASCAR Confo product, not to mention there's more platforms available today like Nintendo Switch that was not available back then. And Nintendo Switch install base is very comparable to those install bases of the Xbox and PlayStation.
That is what I would say is the goal for the NASCAR console product.
Not to mention there's more platforms available today like Nintendo switch.
That was not available back then and Nintendo switch installed base is very comparable to those installed basis of the Xbox and Playstation So we could actually see that that real goal of the NASCAR console game.
Speaker Change: So we could actually see that that real goal of the NASCAR console game could be past those numbers that they have. But as you also alluded, our milestone is really just to get to the levels to have the most successful title, more successful than previous year, every year, as we continue on our journey with this license, all the way until 2030, when that particular NASCAR one is up for renewal.
Could be past those numbers that they have.
But as you also alluded our milestone is really just to get to the levels to have the most successful title more successful than previous year every year as we continue on our journey with US license all the way until 2030, when that particular NASCAR one is up for renewal.
Thanks to me to last question, obviously, Stephen who has departed.
Speaker Change: Thanks, Jim, and to the last question, obviously, student hood is departed here, your head of development. Just curious, and you have resources in Moscow. Obviously, that's been extremely challenging for you. I can hear that in your voice. And I just, I guess, overall, how do you think about your development teams? What are you doing to sort of retain and grow the talent that you have?
Departed here you had a development.
Just curious any skew you have resources in Moscow, obviously, that's been extremely challenging for you I can hear that in your voice.
Just I guess overall, how do you think about redevelopment teams what are you doing to sort of retain and grow the talent that you have.
Speaker Change: And I guess that's it, you know, and if you're looking to sort of, you sort of alluded to bringing in a third party for some help, but just sort of curious if you can double click on the development side doing everything that's happening. Thanks guys.
And I.
I guess that's it.
You know if you're looking to sort of.
You sort of alluded to bringing in third party.
For some help but just sort of curious if you can double click on the development side given everything that's happening thanks guys.
Speaker Change: Sure, and I would say the challenging part is just the situation that's happening in Ukraine. That's the one that takes more heart away, and as I mentioned, I have Ukrainian myself, so it's an emotional topic to say the least.
Sure and I would say the challenging part is just the the situation that's happening in Ukraine that that's the one that takes my heart away and as I mentioned, the Ukrainian and myself so.
It's an emotional topic.
The lease as far as our development is concerned we do not see any interruptions at this point to our processes to connections to the teams to funding. The teams are we're not experiencing any disruptions now should the geopolitical situation changes are which is what you would.
Speaker Change: As far as our development is concerned, we do not see any interruptions at this point to our processes to connections to the teams to funding the teams, we're not experiencing any disruptions.
Speaker Change: Now, should the geopolitical situation change, which is what you would like me to sort of double-click on, we do have other five studios around the world which are constantly ramping up their technical capabilities, their art capabilities, and so on. And when I mentioned about outsourced partners,
Likely to sort of double click on a we do have other five studios around the world, which are constantly ramping up their technical capabilities are the hard capabilities and so on and when I mentioned about our outsource partners. There are partners that we have been using to help us enable.
Speaker Change: There are partners that we have been using to help us enable multiple products being developed at the same time.
Multiple products being developed at the same time look shortly but we have these licenses for a long time the sooner we can get the products out and as many products as it makes commercial sense to do for each one of these licenses the longer our monetization window for each one of those products is so.
Speaker Change: Look, shortly put, we have these licenses for a long time. The sooner we could get the products out and as many products as it makes commercial sense to do for each one of these licenses, the longer our monetization window for each one of those products is.
Speaker Change: So, right now, we'd like to enable as many outsourced partners as we can as we continue to scale our teams organically in all of these different global destinations.
So right now I would like to enable as many outsource partners as we can as we continue to scale our teams organically and all of these different global destinations.
And should geopolitical situation changes with a dose that are in those affected regions.
Then we will start shifting some of those outsource partners more towards our core pipeline products not more the exhilarated once like maybe you could say some of the hyper casual mobile products for US is still currently an exhilarating one instead of the core one vikar Playstation and Xbox.
Speaker Change: still currently an auxiliary one instead of the core one, Vicar, PlayStation, Xbox, PC, and now Nintendo Switch.
D C and on Nintendo switch.
Thanks Dmitry.
Speaker Change: Our next question comes from Michael Graham with Kanakord. Please proceed with your question.
Our next question comes from Michael Graham with Canaccord. Please proceed with your question.
Yeah.
Michael Graham: Yeah, thanks, Hydemetria and John . On the next NASCAR game that you said is going to come out sort of in the late summer fall time frame.
Yeah. Thanks.
Hi, Dmitry and John .
On the.
Next NASCAR game that you said is going to come out sort of in the.
Late summer fall timeframe.
Michael Graham: When you, in the first Ignition Game, you know, there was sort of like a roadmap of features, you know, around things like DLC and, you know, player versus player, you know, a whole roadmap of things that you were planning on putting in, you know, future game releases.
When you in the first ignition game you know there was sort of like a roadmap of features around things like DLC and.
Sure.
Player versus player.
Oh, a whole roadmap of things that you were planning on putting in you know future game releases.
Michael Graham: And I'm just wondering, you know, you sort of have kind of a reset here, you know, maybe some changes in the development staff, maybe some learnings from, you know, the process with the first ignition game. So I'm just wondering if you can, you know, give us any thoughts on what we should expect to see in the next ignition game, you know, that may be an improvement upon what we saw in the first edition.
And I'm just wondering you know you sort of have kind of a reset here.
You know maybe some changes in the development staff, maybe some learnings from that.
The process with the first ignition game. So I'm just wondering if you can.
Give us any any thoughts on what we should expect to see in the next ignition game that may be an improvement upon what we saw in the first edition.
Speaker Change: Thanks, Michael. Look, one thing for sure that the focus started from is to the quality of the product.
Thanks, Michael look one thing for sure that the focus started from east to the quality of the product right and the stability of it. So that is one thing that the the initial foundation of our focus went to immediately so you could foresee that's where cost.
Speaker Change: right and the stability of it. So that is one thing that the initial foundation of our focus went to immediately. So you could foresee that we're constantly going to step up sort of the internal standard that we put ourselves.
They are going to step up sort of the internal standard that would put ourselves right. The QA department and our compliance team. It was the first one we went to a to make sure that with bolstered those capabilities, we restructure our processes there to make sure that we're better identify and track and fix bugs and.
Speaker Change: The QA department and our compliance team is the first one we went to, to make sure that we bolster those capabilities.
Speaker Change: we restructure our processes there to make sure that we better identify and track and fix bugs and those type of things before products come out.
Those type of things before products come out but.
Speaker Change: But to your question as to what can we foresee from sort of the future set in 22 and going forward.
But to your question as to what can we foresee from sort of the feature set in 'twenty, two and going forward.
One thing that we're taking a close look at is our community being extremely vocal as to what they really want to see you could track videos online now that are actually making for example top 10 suggestions of what the 2022 features that should be.
Speaker Change: of what the 2022 features that should be and that is great so you
It is great. So you could.
Speaker Change: foresee that we will be more paying attention to the community, taking their suggestions into what they would like to see in priority order features. As much as we're able to include in these annual releases, we would. Number one, step up the quality. Number two, continue to listen to the community and take their priority and desires and integrate them into the product.
Foresee that we will be more paying attention that's community taking their suggestions into what they would like to see in priority order of features and as much as we're able to include in these annual releases we would.
Number one step up the quality number two continuing to listen to the community and take their to their priority and desires.
And integrate them into their products.
Speaker Change: Okay. Thank you. And then the other one I wanted to ask is just, you know, as it relates to the liquidity profile you mentioned, you know, wanting to bring in new sources of funding and also the ability to reduce expenses if necessary. And I just wanted to ask.
Okay. Thank you and then the other one I wanted to ask you is just you know.
As it relates to the liquidity profile you mentioned.
I wanted to bring in new sources of funding and also the ability to reduce expenses if necessary in.
I just wanted to ask you.
Does that does that really just equate to kind of delaying franchise and game launches.
Speaker Change: Does that really just equate to delaying franchises and game launches? Or are there other things in your cost structure that you can lean on in order to reduce your cash costs?
Or are there other things in your cost structure that you can lean on.
In order to.
Reduce your your cash burn.
Speaker Change: The biggest bucket for us is development and marketing is attached to the development of those products that are in market already with slight investments before the product releases to market.
The biggest buckets for us its development and market right that marketing is touch attached the development of those products are in market already with a slight investments before market before the product releases to market. So the very first thing is not necessarily to flip switches on franchises.
Speaker Change: So the very first thing is not necessarily to flip switches on franchises. It's the amount of products or the amount of platforms each one of those franchises could expand and under which speed. So like I previously mentioned, maybe not a correct label of saying some of the hypercasual mobile product could be an auxiliary one for us. And again, that might not be the right label, but you could foresee that we could
It's the amount of products or the amount of platforms. Each one of those franchises could expand and under which speed.
So like I previously mentioned, maybe not a correct label of saying some of the hyper casual mobile product could be an exhilarating one for us and again that might not be the right label, but you could foresee that we could stop or pause some of those developments until better liquidity position.
Speaker Change: stop or pause some of those developments until better liquidity position but as far as our main franchises that we hold licenses for we want to make sure that the path to those products for core platforms like xbox playstation pc and nintendo switch and some of those franchise instances are hitting on full zone
But as far as our main franchises that we hold licenses for we want to make sure that the path to those products for core platforms like Xbox Playstation D C and Nintendo switch and some of those franchises instances are hitting on full cylinders. It's mobile it's the other.
Speaker Change: it's the mobile, it's the other things that we could put pause on or talk to our external partners on and maybe reduce their speed to market on the amount of resources they're attaching to some of those products for us. That's where we would tap in first.
Other things that we could.
Let's pause on or talk to all our external partners on and maybe reduce their speed to market on the amount of resources. They are attaching to some of those products for us that's what we're what's happened first our infrastructure overall.
Speaker Change: Our infrastructure overall, we do run what we believe is a lean infrastructure and our investment areas are in dev capabilities.
We do run.
We believe as a lean infrastructure and our investment areas our in depth capabilities. So that's the one that we continue to bolster whether it's internal with our organic talent that we retain or.
Speaker Change: That's the one that we continue to bolster, whether it's internal with organic talent that we retain or leveraging externals and contractors in some regards.
Leveraging externals and contractors in some regards so.
Okay, alright, thanks very much.
Speaker Change: Our next question comes from Michael Kapinski with Noble Capital.
Our next question comes from Michael Kaplinsky with Noble capital markets. Please proceed with your question. Thank.
Michael Kinsky: Thank you for taking my questions. Dimitri, you've done an amazing job in a very chaotic situation, and I just want to congratulate you for some very tough work.
Thank you for taking my questions Dmitry.
Sure you've done an amazing job in a very chaotic situation that I just want to congratulate you for some very tough work.
Speaker Change: I know that the employees, mostly in Russia, were largely your engineers. And I was just wondering if you could just talk a little bit about the prospect of what they were working on directly that might be in correlation to whatever products that you had planned to release. I know this has been addressed slightly, but I was wondering if there's any specific products that
I know that the.
Employees, mostly in Russia were largely your engineers and I was just wondering if you could just talk a little bit about the prospect of what they were working on directly that might be in correlation to whatever products that you had planned to release.
This has been addressed slightly but I was wondering if theres any specific products that that.
Speaker Change: that may, you know, kind of push out a little bit.
That may come.
Push out a little bit.
Speaker Change: given that and secondly have things settled down. I know in some cases you were trying to get some of your employees out of Russia and I was just wondering if the situation has kind of improved to somewhat to where you can utilize some of those workers that you had in that in that market.
Given that and secondly have things settled down I know in some cases, you were trying to get some of your employees out of Russia.
And I was just wondering if this situation is kind of improves to somewhat to where you can utilize some of those workers that you had in that in that market.
Speaker Change: Thank you, Michael, for that comment. I think the management team has done a tremendous job being resilient through this.
Uh Huh. Thank you Michael for that comment I think the management team.
Has done a tremendous job being resilient through this situations that are precedent right. It seems like when we started our business you know we're faced with the Covid.
Speaker Change: situations that are unprecedented right. It seems like when we start our business you know we're faced with COVID period and that was an interesting challenge to overcome. Now that there's this one it seems like it's a new norm for us to just operate in some sort of situation. So I pass on your comment to our management team for doing a great job on stepping up to the plate and managing through these situations. But as far as
Period, and that was an interesting challenge to overcome now that there's this one it seems like it's a new norm for us to just to operate than some sort of situations. So I pass on your comment to our management team for doing a great job on stepping up to the plate and managing.
These situations, but as far as part team and specifics on what that is.
<unk> there, Doug we don't have a particular.
Dedicated product to a studio we.
We have a more of a flat approach and more department type approach, where there's art departments out there so.
A desk and engineering are there's physics, and so on and they find their talent across different studios of ours. So it's not like if one studio starts expanding that means aromatic lean more resources go to a specific franchise that.
Speaker Change: So it's not like if one studio starts expanding, that means automatically more resources go to a specific franchise. That is not necessarily the case.
That is not necessarily the case, so it's not like if we start bolstering our Netherlands, a studio all of US on the heart physics engine starts to get more resources. So to answer your question specifically in Russia, we're working on are implementing.
Speaker Change: So it's not like if we start bolstering our Netherlands studio, all of us on our physics engine starts to get more resources.
Speaker Change: So to answer your question specifically in Russia, we're working on
Speaker Change: implementing Unreal Engine, pairing it with some of the physics, they do touch the NASCAR product to some extent, sometimes from the art perspective, sometimes from other perspectives, but that is true for all of our studios, right? Our NASCAR
Our unreal engine pairing it with some of the physics are they do touch the NASCAR product to some extent sometimes from the arc perspective.
Sometimes from some other perspective, but that is true for all of our studios right our NASCAR.
Speaker Change: franchise is really spearheaded from our Orlando studio and you could look at our team in Moscow are leveraging kind of
Franchise is really spearheaded from our Orlando studio and you could look at our team Moscow.
Our leveraging kind of.
Speaker Change: to expand the capabilities of the Moscow studio, of the Orlando studio. So it's really hard to say that one particular studio is responsible for just one specific franchise.
To expand the capabilities of the Moscow students of the Orlando studio. So it's really hard to say that one particular studio is responsible for just one.
Specific franchise, they all do all they.
Speaker Change: They all do all, they do share the knowledge, and the tracking and capabilities of all this is really in a cloud and really not attached to a particular location. So somebody from any one of our studios could continue to pick up a task and resume regardless of where that task was initially started.
They do share the knowledge.
And the tracking and capabilities of all this is really in a cloud and really not attached to a particular location. So somebody from any one of our studios.
<unk> to pick up a task and resume regardless of where that task was initially started.
Well, thanks for that clarification, and I know in some instances where companies have had these missteps.
Speaker Change: Well, thanks for that clarification. And I know in some instances where companies have had these, you know, missteps and issues and things like that that happen in the stock price drops that, you know, that there are companies out there that are tend to be opportunistic.
Missteps and issues and things like that that happened in the stock price drops that you know that there are companies out there that are tend to be opportunistic.
Speaker Change: At this point, there's no interest in selling the company and it sounds like you had been very interested in seeing through, you know, navigating through the issues and seeing it through in terms of all these product launches. And I just wanted just to address that question because it's kind of hanging out there.
At this point, there's no interest in selling the company and it sounds like you had been very interested in seeing through.
You know and navigating through the issues and seeing it through in terms of all of these product launches and I. Just wanted just to address that question because it's a it's kind of hanging out there.
Speaker Change: But Michael, your question is particularly around, would we sell the company just to make sure I understand the question? Yeah, sell the company. Yeah.
But Michael your question is particularly around what do we sell the company just to make sure I understand the question Yeah I felt the company yes.
I look we we have a very clear growth trajectory right, we have amazing portfolio of IP.
Speaker Change: Look, we have a very clear growth trajectory, right? We have an amazing portfolio of IP.
Speaker Change: I think to price something right now where we haven't had a chance to put out a product for these IP and really title together, which I personally believe has not been done previously to our existence. Nobody had a portfolio of these kind of official licenses and were able to tie the games together in a kind of unified player-first experience.
I think to price something right now, where we haven't had a chance to put out a product for these IP and really tie it all together, which I personally believe has not been done previously.
Previously our existence nobody had a portfolio of these kind of official licenses and we're able to tied to games together in a in a kind of a unified player first experience.
Speaker Change: What is that work? That's hard to price right now. So I think we wouldn't necessarily do a justice by our shareholders if we're going to try to put a mark on it before we're able to showcase what this really means to the player. When they could take their experience from one of our racing games into the next racing games, into the next racing game, and continue to build their individual sort of race profile, license, whatever you want to actually call it, and carry that on into multi-racing disciplines.
What is that the war that's far to price right now so I think we wouldn't necessarily do it justice by our shareholders. If we're going to try to put a mark on it before were able to showcase.
What this really means to the player when they could take their experience from one of our racing games into the next racing games into the next racing game and continue to build their individual sort of race profile license whatever you want to actually call. It.
And carry that on into multi racing discipline.
Speaker Change: What what does that look like in terms of value later on as we cultivate this community that's hard to pinpoint, but I definitely would like to see us deliver on that.
What does that look like in terms of value later on as we cultivate this community.
That's hard to pinpoint, but I definitely would like to see us deliver on.
<unk>.
Speaker Change: growth trajectory before we start to entertain kind of price points. Totally agree. Thanks for the call, Eric.
Trajectory before we start to entertain kind of price points.
Oh, Hey, great. Thanks for the color I appreciate it that's all I have.
Thank you.
Speaker Change: Our next question comes from Franco Granda with D.A. Davidson. Please proceed with your question.
Our next question comes from Franco Granda with D. A Davidson. Please proceed with your question.
Hi, good afternoon, everybody and thanks for letting me ask a couple of questions here.
Franco Granda: Hi, good afternoon, everybody. Thanks for letting me ask you a couple questions here. So earlier, John talked about a four and a half million decline in NASCAR games year over year. Can you perhaps give some details around the other individual non-NASCAR franchises?
Yeah, So John talked about a four and a half million decline in NASCAR games year over year can.
Can you, perhaps give some details around the other individual non NASCAR franchises.
Hey, Frank.
Speaker Change: Hey Franco, good to hear from you. So the other products that we have currently in market are, if I can ask our franchise, is Car Craft, right? Our simulation platform that we just recently put out there as a full release.
Good good to hear from you. So there are other products that we are currently in market are despite the NASCAR franchisee is car crack right. Our simulation platform that we just recently put out there as a full release.
Speaker Change: We also have our eSports platform and games that we called R-Factor 2, which is what we use for eSports products to facilitate those events, as well as a standalone product. You can find that on Steam itself, and that's the one that I was saying. We just did a major UI UX update and now reorganized.
We also have our esport.
That form in games that week that we call our factor too, which is what we use for E sports products.
To facilitate those events as well as a standalone product he can find that on our scheme.
Theme itself.
And that's the one that I was saying, we just did a major UI UX update.
And now reorganized our content delivery to be more predictable in our quarterly release schedule. Those are our additional ones that we are currently monetizing if we're talking about just the games segment. Besides what we have inside the NASCAR franchise and those are on the ramp up.
Speaker Change: our content delivery to be more predictable in a quarterly release schedule. Those are our additional ones that we are currently monetizing if we're talking about just a game segment besides what we have inside the NASCAR franchise.
Speaker Change: And those are on the ramp up, both of those products.
Both of those products.
Speaker Change: and we do have a pretty concrete plan which is now found in our investor presentation on our roadmap of, for example, taking car crafts
And we do have a pretty concrete.
<unk>, which is now.
In our Investor presentation on our roadmap for example, taking car crap into a console as well as currency, it's only available for PC. So each one of those even though they're not stamp with an official license like NASCAR in the Lamont for example, but they are standalone products that are starting to contribute.
Speaker Change: into a console as well, because currently it's only available for PC.
Speaker Change: So, each one of those, even though they're not stamped with an official license like NASCAR in the Le Mans, for example, but they are standalone products that are starting to contribute and we are expanding them as well into multiple platforms, which allow them to generate more meaningful revenue contributions for us.
And we are expanding them as well into multiple platforms, which allow them to generate more meaningful revenue contributions for us.
Speaker Change: Right, okay, thanks. And so I acknowledge that, obviously, carcraft is a new product, so comparing it to the early release, maybe not as fair. But when you look at R Factor 2, the game's just been out for a while. Can you give some, your numbers perhaps, since you acquired the game, how it's done, maybe if you've seen the recent upticks, given, you know, the recent news and the new partnerships you have?
Right Okay. Thanks.
So I acknowledge that obviously car crashes of new products that comparing it to the early release, maybe not a fair, but when you look at our factory to spin out for a while.
Can you get some year over year numbers, perhaps since you acquired the game, how it's done and maybe if you're sitting there isn't an uptick given there is some news in the new partnerships.
Speaker Change: We haven't broken out our particular gains into each one, perhaps soon when they start to generate meaningful kind of results, we could start doing that. It is a fair assumptions that there are no growth trajectory, especially since we started to reorganize our daily active users are up there.
We haven't broken out our particular games into each one perhaps soon when they start to generate meaningful kind of results. We could start doing that it is a fair assumption that there are in our growth trajectory, especially since we started to REO.
Organize our daily active users are up there.
Speaker Change: We organize our content delivery schedule.
We organize our content delivery schedule artifact. It too is one that even though like you mentioned it seems like it's been out for a while and that is true. It's been launched for some time, which has also allowed us over time for that product to evolve quite heavily.
Speaker Change: R Factor 2 is one that even though like you mentioned it seems like it's been out for a while and that is true it's been launched for some time which has also allowed us
Speaker Change: over time for that product to evolve quite heavily. That's not one of those annual sequel games that the normally sport titles demand. This is a very serious simulation product. That's actually a similar type of code basis.
That's not one of those annual sequel are games that are normally sport titles demand. This is a very serious simulation product that's actually a similar type of code basis still used in.
Speaker Change: still used in real driver training facilities.
The real driver training facilities. So you can just imagine the sophistication and in order to get to that level of sophistication that takes enormous amount of time. So if anything the fact that it's been launched.
Speaker Change: So you could just imagine the sophistication and in order to get to that level of sophistication that takes enormous amount of time. So if anything, the fact that it's been launched some time ago and been involved with real world drivers.
Some time ago and been involved with real world drivers, giving real feedback on how the physics, but most of the field.
Speaker Change: giving real feedback on how the physics supposed to feel is a huge
It is a huge.
Speaker Change: benefit to that product. So now it's more on releasing the proper packs like we just announced earlier this week that
Benefit to that product. So now it's more on releasing the proper packs like we just announced earlier this week that the Dod.
Speaker Change: That platform is now the official SIM platform of Formula E, another race series that we're now an official license holder for that particular category. And what we did with that is we took that and launched a Formula E pack.
<unk> platform is now the official send platform of Formula E. Another race series. That's we're now an official license holder for that particular category.
What we did with that is we took that and launched a formula E Tech so allow somebody on our factor to download.
Speaker Change: So allow somebody on R-Factor to download the recent cars and recent tracks that are attached to their recent season.
The recent cars in recent tracks that are attached to their recent season. So.
Speaker Change: even though the core product in the beginning was launched some years ago, the evolution of it has grown in value so much that now it's really a content, kind of like an almost a live ops opportunity.
Even though the core product in the beginning with launch some years ago. The evolution of it has grown in value. So much that now it's really a content kind of like almost a life ops opportunity.
Speaker Change: Right. Okay. No, I appreciate all the color. Dimitri, thanks. And then one more, really just following up on an earlier question about the development team, you know, given what is happening on the outside, you know, with the game relative when they're performing and, you know, perhaps some of the fan base not being as happy, can you speak to the employee morale within motorsport games?
Right. Okay. No I appreciate all the color Dmitry. Thanks, and then one more really just following up on an earlier question about the development team.
Given what is happening on the outside.
With the game relative to when they are performing.
Perhaps some of the fan base not being as happy.
Can you just speak to the employee morale, but then motor sport games.
Speaker Change: But the good part is that we have folks that are truly passionate about delivering great racing games.
But the good part is that we have folks that are truly passionate about delivering great racing games. So when they live deliver some things that were short of their own individual expectations. There is a motive of proving themselves now that exist right. So that those that are on the engineering on the marketing.
Speaker Change: So when they live, deliver something that was short of their own individual expectations.
Speaker Change: There is a motive of proving themselves now that exists.
Speaker Change: So, those that are on engineering, on the marketing, on the art side, those that are clearly seeing what the community is calling out as, you know, where's this, where's our rearview mirror, for example, or something to this extent, right? The team is more stepping up in terms of their morale and saying, you know what?
On the art side those that are clearly seen what the community is calling out that you know.
Whereas this whereas our rearview mirror for example, or something to this extent right that the team is more stepping up in terms of their morale and saying you know what.
Speaker Change: we're going to deliver something that we're extremely proud of, that is going to go beyond our own benchmark. And that's what we're noticing. It's not that, of course, it's tough to see your work being shouted at something is not good, but look, we released a game with Vox. There's deserving elements. Our community is right at that.
Where we're going to deliver something that we're extremely proud of that is going to go beyond our own benchmark and that's what we're going to think it's not that the of course, it's tough to see your work being shouted that something is not good but look were released the game with with bogs theres deserving elements.
You need is right at that right. So we're now focused to make sure that those type of.
Speaker Change: right? So we're now focused to make sure that those type of issues don't repeat themselves. But more importantly, the individuals themselves are now in their individual contribution levels are after proving that we are a collection of folks that are super passionate about creating great racing games. And we are going to deliver that to the market. And that's what everybody kind of has in their head that we're here to prove something now.
Issues don't repeat themselves, but more importantly, the individuals themselves are now in their individual contribution levels are after proving that we are a collection of folks that are super passionate about creating great racing games, and we are going to deliver that to the market and that's what everyone.
Any kind of patent their head that.
We're here to prove something now.
Thanks, Dmitry good luck for the rest of the year.
Thank you.
Speaker Change: Thank you.
Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Dmitry Costco for closing remarks.
Speaker Change: Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Dimitri Kosko for closing.
Dmitri Cosco: But I'd like to thank everybody again for your questions, for your comments, and for your belief.
But I'd like to thank everybody again for your questions for your comments.
And for your belief.
Dmitri Cosco: We are still on our clear journey of what we set out to do from the very beginning. Yes, we face some hurdles. Yes, we face some geopolitical things, COVID things, and all types of sort of bumps on the road. But when the mission is clear, when the vision is clear, and when our purpose is clear, which is to us is to make the thrill of motorsport accessible to everybody,
We are still on a clear journey of what we set out to do from the very beginning yes, we faced some hurdles, yes, we faced some.
Geopolitical things Covid things in all types of sort of bumps on the road, but when the mission is clear when the vision is clear and when our purpose is clear which is to us is to make the thrill of motorsport accessible to everybody.
Dmitri Cosco: That is in our veins internally here, so it doesn't matter what bumps we're facing on the road. We continue to go towards our.
That is in our veins internally here. So it doesn't matter what bumps were pacing down the road, we continue to go towards our vision.
Dmitri Cosco: vision and making sure that we deliver on what we set out to do from the beginning. So I just want to thank everybody for participating in the call for
Vision, and making sure that with the liver and what we set out to do from the beginning so I just wanted to thank everybody for participating on the call for.
Dmitri Cosco: tracking our progress and just continue to look out for more. Every quarter we will continue to release materials that showcase our progress towards our goal. Thank you very much again.
Tracking our progress and just continue to look out for more every quarter. We will continue to release materials that showcase our progress towards our call. Thank you very much again.
This concludes today's conference you may disconnect your lines at this time. Thank you all for your participation.
Speaker Change: This concludes today's conference. You may disconnect your lines at this time. Thank you all for your participation.
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Okay.
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Speaker Change: What.
Uh huh.
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Yeah.
Okay.
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